Widen Your Reach Using Transformative Customers

by Christopher Meyer on 01/06/2010

For a child, diving into a swimming pool is a scary proposition. Most parents position themselves 5 feet inside the pool and coax the child to dive to them. Rarely will you see a parent come up behind a nervous child and just shove them in. Pulling evokes sustainable change better than pushing.

Companies can harness what I call transformative customers to pull their organizations through the difficult changes required to compete in a wider world.

Who are transformative customers?

First, they are those that lean into change as opportunity versus threat. In Googled, Ken Auletta tells us how CBS hired Internet savvy Quincy Smith to guide them through the digital revolution while NBC’s Jeff Zucker was telling Harvard University students that he wouldn’t trade today’s “analog dollars for digital pennies”.

Second, transformative customers start by searching for the important questions rather than the final answer. They identify the new realities even though they may not know how to thrive within them. As NYU professor Clay Shirkey points out in Auletta’s Googled, when people demand to know the replacement for newspapers, they’re really “demanding to be told that we are not living through a revolution…. They are demanding to be told that the ancient social bargains aren’t in peril, that core institutions will be spared, that new methods of spreading information will improve previous practice rather than upending it.”

Third, transformative customers avoid complex, multi-customer models. While Amazon’s customers range from individual consumers to publishers, consumer goods manufacturers, used book resellers, and beyond, Amazon places the individual consumer first. A clear test came when CEO Jeff Bezos chose to offer lower cost used books on the same page as pricier new editions. Despite enormous pressure from publishers, Bezos avoided finessing a messy compromise as he knew who was Amazon’s most important customer.

Fourth, transformative customers engage their customers in determining how to support their interests. Intuit’s QuickBooks group actively courts customer enthusiasts in their product development to arbitrate the value of new product concepts and features. Ebay users are famous for supplying buyer and seller ratings that inject confidence into that huge digital marketplace. Transformative customers notably join in the “cause” with their customers.

Last, transformative customers will push your buttons. They will make demands that you can’t fulfill today. While at Silicon Graphics, most of our early customers were using 3D technology for simulations in aerospace and biology. When Disney executives saw the virtual reality technology we developed for aerospace, they immediately reframed it as a new amusement park opportunity: Ride Alladin’s Magic Carpet. Disney’s entertainment requirements pushed our engineers much further than aerospace flight simulators.

Harnessing transformative customers positively disintermediates management. A customer directly telling us what they need versus a manager telling us what we should do, evokes a very different response.

How to get started? The below list begs for additions and examples but consider it a beginning:

Identify your transformative customers – Do you know who they are? Are they the ones you’d like to have?

Get close – This means going beyond typical transactions and investing in a mutually beneficial relationship. Value will grow iteratively through ongoing collaboration and learning.

Share control –Capitalizing on transformative customers’ power and insight means you’ve got to give them the wheel for part of the voyage. They can’t pull you through if you do all the driving.

Hedge your bets – A mentor of mine once told me that “pioneers get the arrows, settlers get the land”. Risk management is why scientists experiment in a laboratory rather than the real world. Create boundaries that effectively mimic a lab until you have confidence to expand beyond that.

Engaging transformative customers is central to working wider. We need to experiment and spread success about new forms of customer engagement that bring value across the globe. What can you add to this conversation?

Why Working Wider?

Value creation has moved from the center of the firm to its edge and beyond. People are working and collaborating beyond home base to create value, including outside their firm. I call this phenomena "Working Wider". It dramatically changes the world of work, what defines leadership, how you compete and win.

We’re not just being challenged to think outside the box -- Now we’re working outside it as well.